September 21, 2012
Management and the Audit Committee
of the Board of Trustees
University of Nevada, Reno
Mail Stop 162
Reno, NV 89557-0090
Re:
Grant Thornton LLP
100 W Liberty Street, Suite 770
Reno, NV 89501-1965
T 775.786.1520
F 775.786.7091
www.GrantThornton.com
University of Nevada, Reno Foundation
Ladies and Gentlemen:
We have completed our audit of the financial statements for the year ended June 30, 2012. Professional
standards require that we advise you of the following matters relating to our recently concluded audit.
The matters discussed herein are those that we have noted as of September 21, 2012, and we have not
updated our procedures regarding these matters since that date to the current date.
Responsibilities under generally accepted auditing standards
As stated in our engagement letter dated June 7, 2012, we are responsible for conducting our audit in
accordance with auditing standards generally accepted in the United States of America (“US GAAS”)
established by the Auditing Standards Board of the American Institute of Certified Public Accountants
and the standards for financial audits of the U.S. Government Accountability Office Government Auditing
Standards (“GAGAS”). Our responsibility, as prescribed by US GAAS and GAGAS, is to plan and
perform our audit to obtain reasonable assurance about whether the financial statements are free of
material misstatement, whether caused by error or fraud. Accordingly, there is some risk that a material
misstatement of the financial statements would remain undetected. Although not absolute assurance,
reasonable assurance is, nevertheless, a high level of assurance. However, an audit is not designed to
detect error or fraud that is immaterial to the financial statements.
In accordance with US GAAS and GAGAS, we are required to communicate to you fraud involving
senior management and fraud (whether caused by senior management or other employees) that causes a
material misstatement of the financial statements. We are also required to ensure that you are adequately
informed about potential illegal acts that come to our attention, unless the matter is clearly
inconsequential. We are not aware of any fraud or potential illegal acts that would cause a material
misstatement of the financial statements.
US GAAS and GAGAS also require that we obtain a sufficient understanding of the Foundation’s
internal control over financial reporting. However, such understanding is required for the purpose of
planning the audit and determining our audit procedures and not to provide any assurance concerning
such internal control or to identify internal control deficiencies.
Grant Thornton LLP
U.S. member firm of Grant Thornton International Ltd
2
Other information in documents containing audited financial statements
Our responsibility for other information in documents containing the Foundation’s audited financial
statements and our auditor’s report thereon does not extend beyond the financial information identified
in our report, and we have no obligation to perform any procedures to corroborate such other
information contained in these documents. However, in accordance with US GAAS and GAGAS, we
have read other information included with the financial statements and considered whether such
information, or the manner of its presentation, was materially inconsistent with the information appearing
in the financial statements. Our responsibility also includes calling to management’s attention any
information that we believe is a material misstatement of fact. No such inconsistencies or misstatements
came to our attention.
Significant accounting policies
The significant accounting policies used by the Foundation are described in Note A to the financial
statements. During the year, the Foundation did not adopt or change any significant accounting policies
or principles. Also, we noted no significant unusual transactions, or other significant transactions in
controversial or emerging areas for which there is a lack of authoritative accounting guidance or
consensus.
Particularly sensitive accounting estimates
Accounting estimates, based upon management’s judgments, are an integral part of an entity’s financial
statements. Those judgments are normally based on knowledge and experience about past and current
events and assumptions about future events. Certain accounting estimates are particularly sensitive
because of their significance to the financial statements and because of the possibility that future events
affecting them may differ markedly from management’s current judgments.
We believe that the following items represent such particularly sensitive accounting estimates:
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The Foundation’s calculation of pledges receivable represents a particularly sensitive accounting
estimate based upon management judgment. Management has informed us that in determining the
appropriateness of this calculation, they reviewed all significant pledges and have considered the
potential uncollectible future amounts. We have performed tests of the present value pledges
receivable calculation to satisfy ourselves as to its reasonableness in relation to the financial
statements taken as a whole.
The Foundation’s valuation of certain commingled investments represents a particularly sensitive
accounting estimate based upon management judgment. Due to the nature of the investments,
readily determinable market values are not available. We have performed certain tests to satisfy
ourselves with the reasonableness of this estimate in relation to the financial statements taken as a
whole.
Management’s calculation of expendable endowment income is a calculation using management’s
judgment. Management has communicated to us that this calculation was made in accordance with
the Nevada Revised Statutes and Foundation policy.
Significant audit adjustments
For purposes of this letter, US GAAS define a significant audit adjustment as a proposed correction of
the financial statements that, in our judgment, may not have been detected except through our auditing
procedures. The definition includes adjustments that were not recorded by the Foundation because they
are not material to the current financial statements but might be potentially material to future financial
statements.
Grant Thornton LLP
U.S. member firm of Grant Thornton International Ltd
3
We proposed two corrections to the financial statements that could, in our judgment, either individually
or in the aggregate, have a significant effect on the Foundation’s financial statements. The entries were
to:
1) reverse net pledge receivables of $1,340,000, which were incorrectly booked twice to pledge
receivables.
2) reverse the recording of a pledge payable to the University for $1,403,722 for fiscal year 2013
basketball pledges.
Disagreements with management
For purposes of this letter, US GAAS and GAGAS define a disagreement with management as a
disagreement, whether or not satisfactorily resolved, concerning a financial accounting, reporting, or
auditing matter that could be significant to a Foundation’s financial statements or the auditors’ report
thereon. We are pleased to report that no such disagreements arose during the course of our audit.
Consultation by management with other accountants
We are not aware of any consultations by management with other accountants during the year about
auditing or accounting matters.
Major issues discussed with management prior to our retention
No major issues were discussed with management prior to our being retained as auditors for the current
fiscal year, including the application of generally accepted accounting principles or US GAAS or GAGAS.
Difficulties encountered in performing the audit
We encountered no significant difficulties in performing our audit.
Should you desire further information concerning these or other matters relating to our audit, Brian
Wallace will be happy to meet with you at your convenience.
This letter is intended solely for the information and use of the Audit Committee, Board of Trustees,
management of the University of Nevada, Reno Foundation and the Nevada System of Higher Education
Board of Regents, and is not intended to be and should not be used by anyone other than these specified
parties.
Very truly yours,
Grant Thornton LLP
U.S. member firm of Grant Thornton International Ltd